Less than eight months after completing the purchase of Los
Angeles-based Bel Air Investment Advisors LLC and New York-based
Wilkinson O’Grady & Co. for a combined $156.3 million,
Desjardins is once again scouting for deals in the world’s
biggest economy.

Fiera, Canada’s best-performing asset manager over the past
five years, is willing to spend as much as C$200 million ($186
million) for a U.S. money manager with about $15 billion in
assets that focuses on emerging markets, global fixed income or
hedge funds, the CEO said.

“There are things we are looking at now, and some of them
are at an advanced stage,” Desjardins said in a telephone
interview from his office in Montreal, declining to name
targets. “We have been working on this for several months, and
something is likely going to get concluded in the next six
months.”

U.S. expansion is part of Fiera’s drive to boost assets
under management to C$150 billion in the next few years. Fiera
oversaw C$80.4 billion as of the end of March, including almost
C$50 billion in fixed-income. Hedge fund and other alternative
investment strategies accounted for C$4.2 billion of assets.

Desjardins founded the company in 2003 after selling TAL
Global Asset Management to Canadian Imperial Bank of Commerce.

“Theirs is a growth by acquisition story, and they have a
track record of doing successful deals,” Christine Decarie, who
holds Fiera shares as part of the C$250 million Quebec
Enterprise Fund she manages for Investors Group in Montreal.
“They are the typical consolidator. I’m positive on stock
markets generally, and Fiera is the type of company that
performs well when markets go up.”

Valuations Rise

Excluding banks, Fiera is the fourth-largest publicly
traded mutual-fund manager in Canada with a market value of
about C$863 million as of yesterday, according to Bloomberg
data. IGM Financial Inc. of Winnipeg, Manitoba, tops the list
with a value of C$12.6 billion, while Toronto-based CI Financial
Corp. ranks second with a value of C$9.8 billion.

Fiera’s 131 percent advance over five years makes it the
best performing of five independent Canadian asset managers,
tracked by Bloomberg News. Since the start of the year, however,
Fiera has declined 11 percent, exceeding the 0.7 percent average
drop of Canadian asset managers.

Underperforming Funds

“All of the asset managers have underperformed this year,
probably because valuations were getting to be a little bit
high,” Scott Chan, an analyst at Canaccord Genuity in Toronto,
said in a telephone interview. “Perhaps part of the depressed
stock price is due to the proximity of an acquisition. They are
pretty close to an acquisition, and if they did one there would
be an equity offering.”

Fiera is “in the market” to acquire a U.S. firm with as
much as C$15 billion under management, Desjardins said,
declining to say how he might finance a deal. That’s almost
double the C$8.5 billion of assets that Bel Air and Wilkinson
O’Grady contributed.

As of the end of March, Fiera had C$21.3 million of
available cash.

“If you buy C$15 billion of assets, you could pay C$150
million to C$200 million,” Desjardins said. “More than that,
it would be too big for our financial means. It’s always a
function of the profitability of the firm.”

Emerging Markets

Emerging markets fund-management capabilities “are what we
lack,” Desjardins said. “We also lack a strong base in
alternative strategies. We have some hedge funds in-house, but
there are thousands of hedge-fund strategies out there. If we
saw someone with a track record and a strategy we’re comfortable
with, we’d be interested for sure.”

Institutional and high-net worth asset managers are also of
interest to Fiera, said Desjardins.

Managing assets for high-net worth individuals “offers
great opportunities for an independent manager, especially in
the U.S. because of its highly fragmented structure,”
Desjardins said. “High net-worth people in the U.S. tend to be
more critical and defensive relative to the large financial
institutions than in Canada. For someone like us, that’s good.”

Given the work he’s put in on the acquisition front,
Desjardins said he hasn’t had much time to fret over Fiera’s
stock price. Not that he’s concerned.

“We haven’t seen any big institutional sellers,”
Desjardins said of the decline in Fiera’s stock. “All I know is
that if the company delivers on its goal to get to C$150
billion, the stock won’t stay where it is now. So I’m not
preoccupied.”